Panasonic Will Help Tesla Crank Out the Gigawatt-hours, but Where?

Tesla Motors and Panasonic confirmed this morning that they will cooperate on the construction of a large-scale lithium-ion battery manufacturing plant in the U.S. Five states in the running to host the $5 billion Gigafactory expect an announcement of its location after the market closes today.

Arizona, California, New Mexico, Nevada, and Texas are the hopefuls to house the facility, which is expected to comprise up to 10 million square feet over 1,000 acres, begin production by 2017 to make 35 gigawatt-hours of cells and 50 gigawatt-hoursof packs per year, and employ 6,500 workers by 2020. (As Seeking Alpha reporter Mira Inbar points out: “50 GW-h/yr is equivalent to all of the world’s current battery production, so, Tesla will basically double global battery manufacturing.”)

Tesla and Panasonic say the Gigafactory will produce cells, modules, and packs for Tesla’s electric vehicles and for the stationary storage market in order to “enable a continuous reduction in the cost of long-range battery packs in parallel with manufacturing at the volumes required to enable Tesla to meet its goal of advancing mass market electric vehicles.”

In today’s statement, Tesla CTO and cofounder JB Straubel said, “The Gigafactory represents a fundamental change in the way large-scale battery production can be realized. Not only does the Gigafactory enable capacity needed for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications.”

Panasonic EVP Yoshihiko Yamadaadded, “Once we are able to manufacture lithium-ion battery cells at the Gigafactory, we will be able to accelerate the expansion of the electric vehicle market.”

Bloomberg reports today that Tesla CEO Elon Musk’s plan is to “transform the company from a seller of $71,000 Model S sedans into a mass-market carmaker capable of producing 500,000 vehicles a year.”

“What makes Tesla’s announcement so important is that it comes just a few years after battery companies such as A123 and Valence Technology filed for bankruptcy, big corporates such as Bosch and Dow Chemical left the industry, and electric car manufacturers Fisker and Bright Automotive closed their doors.”